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FSB calls for business support in Spending Review Image credit: Thinkstock

Britain's smaller enterprises need the support of the government if they are to achieve long-term success, the Federation of Small Businesses (FSB) has said.

In its submission to the government ahead of the Autumn Statement and Spending Review today (November 25th), the FSB warned that many firms will struggle to adjust to significant changes such as the introduction of the national living wage, automatic enrolment in pension schemes and adjustments to taxation on dividends.

The federation urged the government to recognise the need for action in four key areas, one of which was the "geographic imbalances" in the UK's economic performance.

It said developing infrastructure - in terms of both transport and digital services - will go a long way to supporting growth in regional areas.

One example is the need for a solution to the travel problems caused by Operation Stack on the M20 in Kent, which involves lorries being parked on the motorway when transport services across the English Channel are disrupted.

Additional airport capacity was also highlighted as an issue now the Airports Commission has recommended expansion at London Heathrow.

John Allan, national chairman of the FSB, said: "It is essential we have a reliable transport system fit for the 21st century with strong links throughout the country, connecting small firms with their suppliers and customers both in the UK and abroad."

One of the overriding goals for the UK economy at the moment is improving underlying productivity performance, which is relatively weak.

Seeing as they account for nearly half of private-sector employment, small businesses should be "central" to this mission, the FSB said.

The lobbying group stated its support for tax relief schemes to encourage investment in ambitious start-ups and also called for more financial backing for skills, science and innovation, particularly the commercialisation of ideas from universities.

Mr Allan also said the Spending Review should focus on facilitating economic growth through increased exports, possibly by encouraging new businesses to look into exporting when they start out.

"Government must support small businesses to export their goods and services from the start," the FSB chairman said.

"Here the British Business Bank could play a useful role, building on its close understanding of the sector."

On other issues, the FSB welcomed the goal to increase small companies' share of central government procurement by a third, but stressed that "robust monitoring and clear accountability" will be required to hit this target.

Another big consideration for a large proportion of employers is the forthcoming introduction of the national living wage, which is due to come in at a starting rate of £7.20 per hour from April 2016.

The FSB said the impact of this change should "be observed closely", with some small suppliers at risk of being priced out of contracts, particularly in sectors like social care and cleaning.

Summing up its position ahead of the Autumn Statement and Spending Review, the federation said businesses are looking for an announcement that gives them the confidence and stability to continue growing and creating jobs.

"The FSB continues to support the government's efforts to reduce the deficit and improve public finances, but believes that this must go hand-in-hand with prioritising long-term investment to help businesses to flourish," Mr Allan concluded.